Saturday, January 25, 2014

A Black Swan event is something that is so improbable that it doesn't even register until it happens. It's an event that has an extreme impact, arrives as a surprise, is an outlier, appears unpredictable but is understood in hindsight. A big asteroid strike, or a solar storm powerful enough to knock out the electric grid, are examples of Black Swans.

Some wars may be Black Swan events.

We owe the term "Black Swan" to Nassim Nicholas Taleb and his 2001 book Fooled By Randomness. It's a great metaphor. They once believed all swans were white, but in 1697 there black swan was discovered in Australia.

Black Swan is now used to describe the risk of unexpected, high-impact events. The National Intelligence Council cites some examples of potential black swan events in its Global Trends 2030: Alternative Worlds. It's a very accessible and interesting read.

No one seriously, truly, expects China and Japan to engage in conflict over disputed islands in the South China Sea, called Senkaku by Japan and Diaoyu by China. Both countries claim them. Japan controls the islands, but China recently initiated an air defense zone over them. The idea that China may simply take the island by military force does not seem far-fetched. The possibility of inadvertent conflict arising out of these tensions is a worry as well.

China's moves are troubling but Japan isn't helping. Japan Prime Minister Shinzo Abe may be stoking nationalist sentiments by his recent visit to a shrine that is connected with some war criminals. At the World Economic forum in Davos, Switzerland, Abe reportedly compared the relations between China and Japan to those of Britain and German in World War I and invoking the fear of a parallel drift to war. The comparison was subsequently blamed on an interpreter's error, but still. You wonder.

Where does this leave Guam? The U.S. has a defense agreement with Japan so if China were to do something really aggressive, it may force a U.S. response. It's difficult to imagine what may arise. But for Guam it may be one more source of worry (North Korea being another) for an island that may have front row seat to a Black Swan event.

Wednesday, January 22, 2014

Interesting piece at Quartz that cites some data forecasting a rise in tourism from China.

It reports that 21,000 Chinese tourists traveled to Guam in 2012, a figure that can rise substantially in time.

It's not far-fetched to think so, or to hope for. Japanese tourism has been immensely important to Guam's employment base, but it also made Guam too vulnerable to changes in Japan's economy. If China's tourism can grow, it might give Guam more stability.

But tourism from China has a long way to go. As the Japan Times reports: In 2012, nearly 929,000 visitors came from Japan to Guam, 71% of the annual total and a 12.7 percent increase from the prior year.

A total of 1.278 million visitors came to Guam in 2012, up 12.81% over 2011. This level of arrivals has not been reached since 1995-1997. In 2013, visitor arrivals are up more than 5% through April compared to the same period last year, suggesting this year will top 2012’s total despite some challenging events.

The "challenging events" affecting tourism pre-2012 are related to Japan's recovery from its earthquake, tsunami and nuclear power plant incidents.

Guam government is making some bets in its 2014 budget that tourism will increase, and points to how critical it is: "Economic stability in the near term for Guam is contingent on a projected modest increase in tourist arrivals as well as continued strong levels of construction activity," it notes

About me

I write about Guam from a Washington DC perspective, my current home. This blog, launched in 2006, focuses on policy issues, the military and the build-up, economics and environment. I lived on Guam as part of nearly three year Navy tour there. I've been back since for a short visit and hope to make another soon enough. In the meantime, this blog is a simple way to write about one of the world's most beautiful and friendly places, and to help draw attention to U.S. role on the island.

[This blog had to be rehosted in 2016. Lost its links and followers list. In reposting old archives, I cut about half of content. Some of it seemed dated.]